The expression - return on investment - comes from the finance world and refers to the amount of return you can expect from your original investment. The expression is now used frequently in the betting world as a way to benchmark or evaluate how good you are at betting.
The term is probably the best way to measure how good you are at betting; better at least than counting how much money or how many units you have earned or by counting how many successful bets a person has had.
A player who invests £10 in a bet can be a much better player that someone who invests £500 on a game
The reason for this is that different players can invest very different amounts. A player who invests £10 in a bet can be a much better player that someone who invests £500 on a game. Even thought the latter will likely have earned more money in the past year. It’s all about how much return you get on each pound/euro you put down.
What does ROI mean?
ROI shows how much money you win or lose out of your total investment. If you have put down £10 per bet on 500 games and you are up £300 then you have an ROI of 106%. In effect, this should mean that every £10 you put down, you’ll get £10.6 back; an average profit of 60 pence per £10 bet.
ROI can be measured in different formats depending on the context. In Scandinavia for example, you would write ROI 106%. However there are different ways, such as the decimal form which would convert 106% to 0.06. In the international market you would usually just show the percentage of profit, so in this example 6%. It is important to check which form is being used and what it entails.
Examples of ROI
- Example 1
Total turnover: £5,000
Totalt number of games: 150
Total net profit/loss: + £1,000
ROI = 120 %
- Example 2
Total turnover: £75,000
Total number of games: 1,250
Total net profit/loss: + £15,000
ROI = 102 %
- Example 3
Total turnover: £25,000
Total number of games: 2,150
Total net profit/loss: - £1,000
ROI = 96 %
How do you work out your ROI?
ROI is easy to work out and there are a number of methods to help you work it out. The simplest is to divide your net winnings by your turnover. See below!
£200 (net profit) / £10 000 (turnover) = 0.02 = ROI 102 %
- £200 (net loss) / £10 000 (turnover) = - 0.02 = ROI 98 %
What is a good, or a bad ROI?
An ROI over 100% is good, as this means you are in the black. Anything under 100% means that you are in the red. You can expect a different ROI in different markets. A person who bets on small markets with a low limit should have a significantly higher ROI compared with a person who bets on larger markets with a higher limit, such as the Premier league.
If you manage to have an ROI of over 100% over a long period of time and only in the big markets, then you should be pretty pleased with yourself; after all, very few people are able to turn a profit within sports betting in the long-term.
In the short term, it’s possible for anyone to be successful at betting, but very few people can manage it in the long-run.
As mentioned earlier, the volume of bets played is crucial in accessing a player’s ROI. A player with an ROI of 102% after 2,000 bets, can be considered more successful than a person who has an ROI of 120% after 200 bets. In the short term, it’s possible for anyone to be successful at betting, but very few people can manage it in the long-run. This is why the volume of bets is such an important factor.